My Lords, we do not oppose this SI, as we did not oppose the agricultural transition plan, but we think that the implementation of ELMS and the agricultural transition away from the BPS need to work much better and the Government need to look at how they can provide better support for farmers while this transition takes place. The noble Baroness, Lady McIntosh of Pickering, asked specific questions about small farms and tenancies; they are having particular challenges, so it would be good to hear from the Minister on that.
We have heard a lot today about how climate change continues to threaten farmers’ livelihoods. I am sure the Minister is aware that the NFU has suggested delaying ELMS while certain things are sorted out. While we have some sympathy because of the struggles farmers have had recently, delaying the implementation of ELMS and the phase-out of basic payments is not the solution.
Policy-driven agricultural practices have been one of the single biggest drivers of wildlife loss in the UK over the past 50 years. We are concerned that, if you start delaying the ELMS rollout, all you will do is create more uncertainty at a time when farmers desperately
need certainty. They need to be able to plan—and to plan to farm in a way that provides food but also benefits nature. As my noble friend said, we will not reach net zero or be able to tackle species decline and biodiversity loss without the widespread adoption of nature-friendly farming practices. We have also heard that the biggest long-term risk to our food security comes from climate change and environmental degradation. That is why it is important that we get these schemes to work effectively for farming.
My understanding is that there is almost a £1 billion funding gap for agriculture to meet existing nature-recovery and net-zero targets. I do not expect the Minister to pull £1 billion out of his back pocket, but it demonstrates that this is a huge problem that needs addressing. Instead of doing what the NFU has suggested and pausing ELMS, have the Government thought about using the emergency financial measures available to them in Section 21 of the Agriculture Act? There are powers to add an additional emergency fund on top of SFI for farms that are suffering the greatest climate damage. Have the Government looked at that as a way of supporting farmers? Given the terrible weather we have had, including flooding, would that be an option?
I want to look at some of the farmers’ concerns, because the NFU is clearly not happy with the way things are at the moment. The noble Earl, Lord Russell, talked about many of the concerns in the NFU’s latest annual farming survey, which gives a good overview. It shows the lowest level of confidence in at least 14 years, and extreme weather and the phasing out of subsidies are cited as the primary drivers. Tom Bradshaw, the new president of the NFU, said his concern was that,
“if members don’t have confidence, then we as a country can’t deliver food security”.
That is a real worry.
One factor in that is the weather, about which we have heard a lot, but what was quite striking about the survey was that mid-term confidence had been hit harder than short-term confidence. That is striking because it shows that farmers are losing trust in the Government’s ability to support them through this transition period and during the challenges of climate change. Will the Minister comment on that? How are the Government working to bring back farmers’ trust? It is very important.
On the weather, analysis by the non-profit Energy and Climate Intelligence Unit forecast that crops could be down by nearly one-fifth as a result of the wet weather, and that it was likely that prices for bread, beer and biscuits, for example, would rise. Has Defra made any forecast of the impact of continued bad weather on inflation and on harvests, for example?
The NFU is concerned that the combination of the BPS being down by 50% and all these extra pressures will mean that farmers are more likely to borrow. Borrowing is more expensive, and the NFU is concerned that, as Tom Bradshaw, put it, we are facing
“the perfect storm of events”.
This is about looking at the bigger picture of how the Government will support farmers. What steps are they taking, or proposing to take, to support farmers with those extra costs?
We know that red diesel has been a particular problem, but I am not expecting the Minister to answer the difficult questions around red diesel today. I have spoken before about the benefit that family co-operatives can bring when costs are high. Have the Government looked at that, particularly around investing in new machinery, which can help to mitigate some of the difficulties that farmers are facing?
Finally, we completely agree that we need a fairer system of payments based on the principle of public support for public goods, which ELMS is bringing in, but the Government need to grasp that more must be done to make the system work much more effectively than it does at present for farmers and the environment.
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